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Capretta and Levin: Why ObamaCare Is Still No Sure ThingThe majority of state governors are Republicans, and they have the power to disarm the health-care law.

Champions of ObamaCare want Americans to believe that the president's re-election ended the battle over the law. It did no such thing. The Patient Protection and Affordable Care Act won't be fully repealed while Barack Obama is in office, but the administration is heavily dependent on the states for its implementation.

Republicans will hold 30 governorships starting in January, and at last week's meeting of the Republican Governors Association they made it clear that they remain highly critical of the health law. >>>

Running the exchanges would be an administrative nightmare for states, requiring a complicated set of rules, mandates, databases and interfaces to establish eligibility, funnel subsidies, and facilitate purchases. All of this would have to take place under broad and often incoherent statutory requirements and federal regulations that have yet to be written.

The exchanges would create unsustainable pressures on each state's insurance market, treating similarly situated people differently by providing far greater subsidies for those in the exchanges than those in employer plans—yielding perverse incentives that distort consumer and employer decisions and increase costs.

States would endure all this simply to become functionaries of the federal government. The idea that creating state exchanges would give states control over their insurance markets is a fantasy. The states would be enforcing a federal law and federal regulations, with very little room for independent judgment.

Governors know this. A group of them has already indicated that they will not build the exchanges, and several more seemed ready to opt out as the administration's deadline for state decisions approached on Nov. 16. >>>

By declining to build exchanges, the states would pass the burden and costs of the exchanges to the administration that sought this law. And it is far from clear that the administration could operate the exchanges on its own.

Congress didn't allocate money for administering federal exchanges, and the law as written seems to prohibit federally run exchanges from providing subsidies to individuals. The administration insists that it can provide those subsidies anyway. But if the courts read the plain words of the statute, then federal exchanges couldn't really function.

Thus states that refuse to create their own exchanges would effectively be repealing a large part of the law—sparing their citizens from the job-killing employer mandate and from assaults on their religious liberty. In some cases people would even be spared from the individual mandate to buy coverage, since in the absence of exchange subsidies more families would qualify for exemptions from the mandate. >>>

President Obama won re-election and Democrats maintained control of the Senate this month, but the states hold the future of ObamaCare in their hands. Knowing the harm the law would do to their citizens, to the economy and to American health care, governors should refuse to become its enablers.

Thus states that refuse to create their own exchanges would effectively be repealing a large part of the law—sparing their citizens from the job-killing employer mandate and from assaults on their religious liberty. In some cases people would even be spared from the individual mandate to buy coverage, since in the absence of exchange subsidies more families would qualify for exemptions from the mandate.

I can't believe it's actually that simple.

Or, maybe Nancy should have read the bill to find out what's in it before she passed it.

Last July, I wrote that the states still had the power to kill Obamacare, despite the Supreme Court's gross dereliction of duty in Florida v. HHS. My point was that the insurance exchanges required by PPACA are the key to its success or failure, and that the law grants the states enormous power in the way they are set up. >>>

>>> if the states refuse to set up exchanges, they cut off the subsidies and tax credits that are the lifeblood of Obamacare. Moreover, states that decline to set up these enabling bureaucracies will also be protecting their business communities from job-killing federal penalties -- even if the federal government comes in and sets up its own exchanges in those states. The Cato Institute's Michael Cannon explains, "defaulting to a federal exchange exempts a state's employers from the employer mandate -- a tax of $2,000 per worker per year." This is why more than half of the 50 have opted not to set up state-run exchanges.

Last Friday, three more governors officially announced their refusal to set up state-run Obamacare exchanges. Ohio's John Kasich, Wisconsin's Scott Walker, and Maine's Paul LePage all released statements indicating that they would not assist the Obama administration in its effort to socialize health care in their states. >>>

>>> the grim reality is that Washington won't be content to merely control the exchanges. Federal bureaucrats have already begun rewriting the law when the provisions of the actual statute prove inconvenient. >>>

This outrage prompted the state of Oklahoma to file an amended complaint in the U.S. District Court for the Eastern District of Oklahoma. The state points out that "The State of Oklahoma has exercised its right not to establish an Exchange" and that the provisions of ObamaCare "not only permit the State of Oklahoma to make this policy choice, but also created a mechanism … by which the State of Oklahoma can put its decision into effect." It goes on to show that "The [IRS] Final Rule renders the mechanism inoperative." In other words, Oklahoma complied with the provisions of the law and now the IRS has illegally ignored those provisions. >>>

Inside the Beltway, Republicans seem prepared to wave the white flag on Obamacare. Shortly following the election debacle, House Speaker John Boehner declared that "Obamacare is the law of the land." The tsunami of criticism he received pursuant to that ill-considered remark is probably behind the effusive praise he heaped on John Kasich for his decision to opt out of a state-run exchange for Ohio: "I'm proud of my governor for taking a stand and resisting the federal takeover of healthcare in Ohio." And, regardless of Boehner's sincerity or lack thereof, the states are probably our last hope of getting rid of this big-government boondoggle.

So, the long twilight struggle continues. Without its insurance exchanges, the Obamacare scheme simply will not work, but the states are fighting in the last ditch against an increasingly powerful and lawless federal government determined to foist them on us. If the states are bullied into setting up their own exchanges or the IRS gets away with its extralegal rule to fund federal exchanges, we're probably stuck with it. Speaker Boehner's bleak post-election assessment will have been correct after all.